Dean Durling of Quick Chek is CSPs 2010 Retail Leader of the Year.

A rep for a major beverage company is on a flight home from the NACS Show. He notices that his seatmate is reading CSPmagazine. “Hey, are you in the industry?” the beverage rep asks. “Who do you work for?”

“Quick Chek,” the man replies.

“Oh, really?” the rep asks, and flips through his mental Rolodex for the name of Quick Chek Corp.’s beverage buyer. “Do you work for Bill Tencza?”

“Dean could have said he was the CEO and president of the company, but he just went with it. If there are successes here, he won’t stand up and say, ‘I did this.’ It’s ‘us.’ ”

Quick Chek Food Stores, Whitehouse Station, N.J., is synonymous with innovation, disciplined execution and highquality employees. It is a remarkable achievement, considering the company has flourished in a state where building a new store takes four years and regulations shackle the easy money of the c-store business: smokes, fuel and beer.

With 125 stores in New Jersey and New York, Quick Chek is small compared to giant independents such as QuikTrip and Sheetz, but its impact on industry thinking is arguably just as great. And it’s here where leadership has made the difference.

Dean is the third leader of Quick Chek, a company established by his father, Carlton Durling, in 1967 and then led by his mentor, Bob Page, for three decades. Some might presume that, after becoming president in 2003, Dean had the easy part: take what was built and just stoke the embers. But that would be underestimating him.

“As he took over the company totally, it was important to maintain solid fundamentals already established,” says Bruce Krysiak, a Quick Chek board member for the past 10 years, and former president of Toys ‘R’ Us and Dollar General. “He wanted to grow the company faster in a positive way and was interested in how to make the company better. Where can we innovate more?”

“We call it ‘restless dissatisfaction,’ ” Dean says in an exclusive interview with CSP. “In the business, it’s never really being satisfied, and how do we improve things? Sometimes we appreciate what we’ve done, but then say, ‘How do we move on?’ ”

You see the results in Quick Chek’s made-to-order foodservice program, which generates one-half of in-store profits. You sense it in the expansive coffee bar with its digital timer that tracks freshness. You admire the chutz-pah of the self-checkouts—an industry first—and the embrace of social media and creative marketing campaigns. But the friendly smiles and passion of Quick Chek employees drive it home.

“He wants you to take full ownership,” says Liz Ferraro, store leader for Quick Chek’s store in North Branch, N.J.

“When I’m in my store, I feel like my store is my store—not Dean’s. And because he is so driven, and the risks that he takes and the changes he makes, he’s not afraid of risk or change. And he made me not afraid of risk and change.” “When he comes in, what I really, really love is that he goes to each one of my employees, shakes their hand and tells them, ‘Thank you for doing a great job,’ ” says Tina Ogilvie, store leader for the Bloomfield Quick Chek. “He tells us all how proud he is. Then in the middle of that, I usually find him standing off to the side, just watching and analyzing every single thing that’s going on in the store, because he’s got to be who he is.”

A servant leader. A cerebral thinker. A man who thrives in the controlled chaos of retail, with its countless moving parts.

“You have to do 100 things right to be the best: people, processes, having the right coffee, subs, real estate, maintenance,” says Dean. “Retail is detail— that’s what’s so intriguing about our business, and what we’re doing here.”

And it’s in this spirit of innovation, leadership and continuous improvement that CSP is honored to name Dean Durling as its 2010 Retail Leader of the Year.

QUIET PERSEVERANCE

Dean is an established member of the New Jersey gentry. He has a prep-school pedigree. His passions have included sailing, dressage and fox hunting. And he has a level of control, from the way he prioritizes his thoughts to his conservative, crisp clothes, that is simply admirable.

“He’s a quiet soldier, marching along to his own drumbeat,” says Stan Sheetz, CEO of Sheetz Inc., Altoona, Pa., a friend who has served with Dean on the NACS board. “The guy’s pretty set in his ways. An example is his blazer and button-down shirt: Even if you tell Dean to ‘go casual,’ he still has on that damn button-down shirt and blazer.”

Dean, 55, lives in his childhood home, a rambling but refined house built by his father on the scenic Durling farmland; family lore has it that baby Dean was carried upstairs on a ladder while the home was under construction. His parents and brother also live on the compound, in farmhouses nearby. And although the cows on the surrounding fields are gone, the agrarian heritage of Quick Chek perseveres. Dean’s great-grandfather established the Durling Farms milk business in 1888, producing, packaging and processing milk, and shipping it throughout the New York metropolitan market. His grandfather grew distribution and oversaw a fleet of milkmen. But by the late 1950s, supermarkets were encroaching on that business. For Carlton, as third-generation leader, it meant that Durling Farms had to become a retailer to survive.

Those first Quick Chek Food Stores were downtown “superettes,” stocked with milk, bread, a deli and produce. Bob Page joined in 1968 as general manager. While he ran the stores—which at that time numbered three—Carlton focused on finances and real estate.

“The office was in the back of a store, and in the wintertime when the truck unloaded, snow came into the office,” says Page, laughing at the memory. “It was great, because we learned to make lots of mistakes, and learned the business from the ground up.”

It’s part of what Dean refers to as Quick Chek’s “DNA.” “The principals in our dairy business were fresh products, friendly people and serving the New York metro market,” he says. “When you think about it, those are the same things we do today.”

During that time, young Dean would ride his bicycle to the Durling Farms processing plant and catch a lift on the milk truck to the stores to stock shelves. He accompanied his older brother, Corey, on a milk route and stayed busy with chores on the farm: mowing the lawn, bringing in the hay and, in his down time, chasing cows, fishing and riding ponies.

As the second-oldest of three children, Dean was not the traditional heir apparent of Quick Chek. He was given the chance to work at the farm and in the stores, but there were no reserved spaces. That philosophy has extended to his five children and 2,600 employees. “I call it ‘opportunity,’ ” says Dean. “We’ll provide opportunities, but people have to take them. We’re not going to deliver it on a silver platter. So as I was growing up, whether it was on the farm, in the stores, over summers or over holidays and Christmas, I found opportunities and then I took them.”

It was a stealth progression of sorts. “There wasn’t a heck of a lot of attention that went to Dean,” says wife Liz, a Rhode Island School of Design graduate, citing his middle-child status and understated personality. “So he would just observe things around him and quietly learn. I think that was what made him strong and successful.”

In 1977, after graduating from Cornell University with a food-retailing degree, Dean joined the humanresources department at Quick Chek. He eventually moved through marketing, real estate and other departments on his way up.

“My responsibility was of course to mentor him, round him out and watch him grow,” says Page. By this point, Dean had become Page’s obvious successor. He was named CEO in 1988. His brother, Corey, today president of a dairy marketing consultancy, as well as a board member and co-owner, had worked in the stores but pursued other interests. By the late ’80s, Quick Chek was a thriving, strong retailer. Page had built a solid foundation upon which Dean could create an even more ambitious operator.

The focus on food and coffee, understanding customers, the initial efforts at employee development and the growth of Quick Chek to 100 stores laid a foundation, says John Schaninger, Quick Chek vice president of sales and marketing and a 30-year employee.

Dean, says Schaninger, “also has a long-term view of things, but it’s much more structured, and he has a path to get there.” He introduced discipline and purpose to the company’s retail journey. And the destination: be the best fresh convenience marketer in the New York metropolitan market.

SPINNING THE FLYWHEEL

At Quick Chek headquarters, a map of the region outlines the ambition. With Manhattan as the epicenter, a red circle encompasses the 75-mile radius that the company is focused on dominating.

Focus is important, says Mike Murphy, senior vice president of operations. With 34 years under his belt, he’s a true Quick Chek veteran.

“Sometimes in the past, we’ve had too many objectives in a year, and what happens when you have too much stuff is you don’t do a good job of getting it executed,” says Murphy. “[Dean] has a very clear focus. He involves the team; he works very hard on getting a consensus as to what we’re doing and why we’re doing it. He can be relentless in pursuing it.”

Indeed, in any conversation with Dean, it’s not long before he brings up Quick Chek’s flywheel. In his office, a placard illustrates the three integral components that, in the vernacular of business guru Jim Collins, create the “flywheel effect,” or a self-sustaining economic momentum for the company. Quick Chek is a great place to work, which makes it a great place to shop, which makes it a great place to invest. The first piece was set in place during the Page years, when the executive team became engrained with Larry Wilson’s “Playing to Win” strategy of building company leadership and a strong company culture. The theory: If you’re not playing to win, you’re playing to lose, and letting fear prevent employees and the company from growing. It places the willingness to change, innovate and take calculated risk as the driving force.

“Most cultures don’t work because people can’t manage their fears,” says Page. “They’re worried about letting go. They’re afraid of being the best they can be and giving it all they have.”

For Quick Chek, the process of establishing a strong culture took five to six years of training, from management down to store-level employees. Much of it focused on hiring team members who were eager to work as part of a team toward specific goals and be willing to try new things.

Today, Quick Chek hires for attitude over skills with a behavior-based interviewing process. Each potential recruit is asked similar questions by two people, who then must come to an agreement on how well the interviewee fits the bill.

“This has helped getting employees on the first day, asking questions. They’re engaged, and that’s what we want—we want people who are engaged in this business,” says Murphy.

Murphy and Dean meet with each new employee and oversee the 8-hour orientation. “Our team members are really part of our brand and how our customer sees us,” Murphy says. “We have to make sure as we grow that we don’t allow that to be weakened or diluted in any way.”

Quick Chek is constantly enjoying the rewards. Schaninger tells of a customer who had forgotten his wallet containing more than $800 at the counter of a Quick Chek store. When he went back to the store to find it, a team member gave it back—fully intact—and refused to accept a reward. Schaninger later asked the team member about the incident. “She said, ‘Why would I take it? It’s not my money,’ ” he says. “How perfect is that?”

“Now we know it works, because it perpetuates itself,” says Page. “Dean comes down with the senior vice president of operations and human resources, and they talk to every single new employee … about the culture and what their responsibility is. Culture is a responsibility of everybody; it’s not the responsibility of one person.

“It’s about leading,” he says. “It’s not that [Dean has] done any one thing, because the people who’ve worked for him have done it.”

Happy employees, as the saying goes, make a great place to shop. But that third piece of the flywheel—profits— did not appear until later. “If it’s a great place to work and shop, profits will be there—leave it silent,” says Dean, recalling the logic at the time. “But then three years ago, I looked at it and said, ‘Wait a minute—we need profits.’ And people need to know that and understand what happens to it.”

Thirty percent of profits are paid out in bonuses to employees; the remaining 70% is reinvested in the company to build and remodel more stores, and introduce new programs. “This makes it a great place to work, so we’re providing opportunities for us to grow and do better,” says Dean. “It’s sharing in the growth both in profits and opportunities.”

EVOLUTION VS. REVOLUTION

Dean is a firm believer that evolution, as opposed to revolution, is the best form of change for Quick Chek. It stays true to market forces and proceeds at a pace that ensures quality execution. “I don’t make any big strategic decisions,” he says.

But when he took over as president in 2003, Dean had an adjustment to make to the business model that could be described only as huge.

For a convenience retailer with more than 40 years under its belt, Quick Chek is a relative newcomer into gasoline, having opened its first fueling locations only 10 years ago. With the company’s deep roots in food, it took time for everyone in company leadership to accept that food and fuel canmix.

The other “excuse” for not getting into fuel, says Dean, is the regulatory and geographic gridlock in New Jersey, not only in terms of permitting, but also dealing with the prospect of mandatory full-service and fighting local opposition.

But as the new Quick Chek team saw it, fuel was a strategic necessity, especially as the state of New Jersey continued to ratchet up excise taxes on cigarettes. During strategic planning, the group wrestled with the following: “If cigarettes went away, how would we survive?”

“That was the turning point,” says Dean. “OK, no new stores will be built without fuel.”

It did not come without sacrifice. Quick Chek had sites slated for development, with more than half of them unsuitable for fuel. “So I had to take those out of the pipeline, and then we had to write it off,” says Dean. “When we did that, that was putting a stake in the ground and saying, ‘OK, we have the direction we’re going.’ ” Today, 28 sites offer fuel, including all nine locations in New York.

Dean describes Quick Chek as “aggressive marketers,” and considering from whom he learned the business— RaceTrac and Sheetz, among others— it’s little surprise. And he was a careful, patient student, the retailers say.

“What Dean tends to do, before he pulls a trigger, is fully study things, try to understand what the nuances are of this new business … and really try to understand how it could help their organization, and help them to potentially drive more customers into their stores,” says Sheetz.

“He researched wholesale, retail, equipment, the layout sides of it, and operating in New Jersey—one of the few areas of the world that requires full service,” he continues. “I think everyone else in the world forgot how to do that, and Dean had to learn how to do it. “

“He’s executed the gasoline program exceedingly well, especially for someone in the gasoline business for such a short time,” says Carl Bolch, president and CEO of Atlanta-based RaceTrac. “He’s an excellent student. Right now, he’s deep into the self-checkout, and it seems like he’s doing it in a very thoughtful way, and in a pioneering way for our industry.”

He credits Dean for having the confidence and initiative to tackle such bold change. “When you come into a business that your father started, you don’t always come in wanting to change things,” says Bolch, who worked through the ranks of his own family’s wholesale business. “A lot of times you’d come in and make initial changes, but then think you’ve done it all or enough, and move over to the mode of being satisfied. I think he’s not constructed that way. I think he’s persistent in his desire for continuous change.”

POSITIVE PRESSURE

While Dean has overseen some of Quick Chek’s biggest transitions, he is better known for steering steady, incremental improvement. The company’s financial year starts in November, with numbers set by month for sales, grossprofit dollars and margin. Progress is reviewed on a weekly basis. Indeed, each Sunday morning, you’ll find Dean sitting at his kitchen table, laptop open and the financial results of the past week spread before him.

“We close our week on Friday night, and reports run Saturday night. So Sunday mornings we’re looking at reports, and Monday mornings are very important to how we’re going to react,” says Dean. “In retail, you’ve got to react right away.”

On Monday mornings, the senior management team gathers to review the numbers and agree on a direction.

“Every week when you come in, on Monday morning, you have to know your numbers,” says Tencza. “Marketing is judged on sales, gross-profit dollars and margin. If you’re off on any of your categories—I have six categories— you have to have an explana-tion why you’re off by noon.” The weather and recession do not apply.

Despite the pressure for those with red on their P&Ls, in the end, everyone at the meeting is the part of a team.

“We all have different roles in getting to the numbers, but each person has the same numbers,” says Murphy. “We’re not working in silos. If someone is missing on a number, what can we do? Can the answer come from our controller, if the question is financing something? Can it come from marketing or operations? Or it can come from Dean.”

It’s a process that the Quick Chek team refers to as “getting into the root cause”: Avoid the blame game, and instead focus on what went wrong, what needs to change and how to get back on track.

Dean’s steady head helps keep the team focused; he’s more likely to throw out a hypothesis than an expletive. “Dean is very even-keeled when it comes to an issue,” says Murphy. “When you get emotion into a problem, you get back into silos, protect your turf, and don’t get into what the root cause of the problem was.”

There’s accountability inside the stores as well. Each month, all stores are mystery shopped during all shifts. Scores of 90 or above—typically earned by more than 90% of stores—win a $50 bonus for each nonmanagerial store team member. Those who don’t make the grade know exactly why they came up short.

Murphy and Dean also schedule visits to each store twice a year, and they compare those numbers to the company standard. “It’s about catching people doing it right,” says Murphy. “People know what our expectations are.”

Quick Chek gets to the root cause of successes as well. It will place its top 20 performers with the bottom 20 to talk about how they excel in sales, shrink, hiring or any other metric that needs improvement.

COMPETITIVE SETS

While privately owned Quick Chek declined to share specific growth figures, it confirmed gross revenues of more than $700 million and continued samestore sales increases year over year.

In 2009, store traffic was off in the morning because of unemployment, with loss of construction jobs the leading cause, says Dean. “You find ways to drive traffic, customers and sales. At the end of 2009, when the economy had hit the biggest skids it ever hit, we had a record top line and record sales; we opened a record number of stores, we hired a record number of new employees, and we had a record bottom line and record bonuses during one of the worst economic times of the last 50 years,” he says.

Much of the success can be credited not only to the company’s stellar foodservice and coffee program, with its 20-minute freshness guarantee, but also Quick Chek’s innovative marketing, including popular Facebook page and a “skinvertising” campaign: Customers who make a purchase earn a hand stamp that entitles them to a free sub. The company has also built a sense of community through its annual Quick Chek New Jersey Festival of Ballooning, which brings out a crowd of 150,000. With its entrenched market position, strong employee culture and spirit of innovation, Quick Chek seems to have all of the advantages, even in the face of competition from retail heavies such as Wawa, which has begun opening sites in Quick Chek’s Northern Jersey stomping grounds.

“[Quick Chek is] very focused on customers and their people, and I think that’s their No. 1 differentiator,” says Krysiak. “No. 2, they’ve been established in their market for a long time. It’s very difficult to get locations, even for them, so they have to work very hard to grow.” Third, the stores are well run and innovative, he adds. And No. 4, Dean is at the reins.

“[Dean] is always trying to push out and ask, ‘Can we innovate more? Can we do more for our customers?’ He’s never satisfied with where the company is,” Krysiak says.

It’s restless dissatisfaction such as this that is helping Quick Chek move closer to its goal as the best convenience marketer in the New York metro area. Whether it reaches the target is entirely up to Quick Chek customers and employees. “If I’m on the corner of First and Main, and you’re on the opposite corner, I’m going to beat you,” says Dean. “That means we’re the best in the market. If you look at all the different brands in this market for convenience and quick-serve, people prefer Quick Chek as No. 1.”

The company surveys customers and employees annually and benchmarks against the competition to keep track of its progress. Dean admits that Quick Chek will never have the most stores in its market—but that’s immaterial.

“Customer opinion, sales, profitability, employee satisfaction, my turnover is half of yours, I have much better team members, I attract better people—and you just sit there wondering why you come into work every morning,” he says. “That’s being the best in the market.”

Family Time

“His character is very home-bound,” says son Jonathan about Dean. “It’s really about enjoying the people around him.” He shares the childhood memory of wintertime at the farm, when his dad would pull him and his siblings on a toboggan behind his Jeep down the snow-covered hills. Afterward, they would come inside to a roaring fire. “Looking at photos, you’ve got hot chocolate in the background, the big fireplace,” he says, laughing about how the scene resembled a catalog. “We each have our own Patagonia fleeces with our initials on it.”

Whenever the older Durling children—Jonathan, sister Ngaere, and brother Chapman—are in town, Dean will prepare a healthy, hearty meal to bring the family together.

“Steak on Fridays, chicken on Sundays is the joke of my sister, brother and I,” says Jonathan. “I think every parent does that: In order to get the family together, it’s based around the dinner table.”

And dinner conversation is kept decidedly democratic. “Sometimes he will stop the dinner conversation if it focuses too much on one or the other, and make it go to one of the other children,” says wife Liz, mother to Oliver and Posey. “Maybe Posey’s looking bored and he’ll say, ‘OK, Posey, tell me about riding today.’”

Master of the Hunt

Winston Churchill once said, “There is something about the outside of a horse that is good for the inside of a man.” For Dean, horses have provided a thrill from childhood through adulthood. While he gave up riding later in life, he still has a soft spot for the sport.

“I never really lost that love for riding horses,” says Dean. “But the best thing about it was the thrill. It wasn’t riding horses in shows. It was more the thrill of racing or going fast and steeple chasing and taking fences. And the thing that really delivered that was fox hunting, or fox chasing. In fox chasing, what happens is you take hounds out, 40 hounds, and they’ll work across the countryside looking for the scent of a fox …

“One may see something, and it’s almost like business. If somebody has an idea, they talk about it. A couple of other hounds come over, they talk about it, and the next thing you know, you’ve got 40 hounds screaming at bay, running off in that direction.”

O Captain, My Captain

With his understated personality, Dean is always surprising friends and family with his hidden talents. Son Jonathan recalls a father-son sailing competition at the local yacht club when he was around 12 years old. His leg of the race did not go well.

“I got second to last,” recalls Jonathan, now a sales rep for Altria. “I was so ashamed, and [thought] poor Dad would get out there and we’d be the joke of the fleet. But I didn’t even know this—Dad was an amazing sailor; he grew up sailing as well. He got in a boat and came in first. It wasn’t first by a little bit: He whupped everyone.” That includes the yacht club’s sailing coach. This was enough to clinch third place for the Durling team.

Setting Priorities

While Quick Chek has had a few turning points that have forced it to choose a path, on March 7, 2000, Dean realigned his priorities. His eldest son, Chapman, was in a serious motorcycle accident.

“I had a lot going on in my life then,” Dean says. Beyond running Quick Chek, it included chairmanship of NACS and committee work; serving on company and charity boards; and hobbies such as horseback riding and fox hunting.

“I got a pad of paper out and I wrote everything down that I was involved in, everything that I was doing in my life, and I circled two things,” he recalls. “No. 1 was my family, and No. 2 was Quick Chek. I came to the realization that if I could be the best husband and father, and the best leader for Quick Chek, that would be it. That would be satisfying.” Way to Go Quick Chek employees receive a special “Way to Go” note from Dean and senior vice president of operations Mike Murphy after a successful week of business. Criteria include going “above and beyond,” any store that has sales increase over 5% or hits its shrink number, and stores that hit budget to the yearly plan.

NEW DEAL:

Quick Chek’s new branding, spearheaded by vice president of sales and marketing John Schaninger, has taken on a life of its own. While it was originally designed to communicate freshness, the new logo also gave some customers the impression that Quick Chek was a green company. To make good on the “promise,” the retailer installed solar panels at its headquarters and built its first LEED-certified store.